Kenya is seeking an extension of the Debt Service Suspension Initiative (DSSI) to June 2022. This will give the East African country a one-year extension from the June 30, 2021 date granted in January
Apart from the relief under the DSSI, the country is also asking for new limits to access IMF funds through the reallocation of existing special drawing rights and the allocation of new special drawing rights.
This will allow faster access of disbursements from the International Monetary Fund or IMF Rapid Credit facility and the Rapid Finance Instrument, granted to countries facing urgent balance of payment needs.
These developments come only a few days before the IMF decides on Kenya’s $2.4 billion loan request to buffer the country’s response to the COVID-19.
Central Bank of Kenya (CBK) Governor, Patrick Njoroge, notes that the IMF Board would decide on the loan on April 2, with the first tranche of $314 million expected next week. In May 2020, the IMF issued Kenya a $739 million interest-free loan to cushion the country against the pandemic’s shocks.
Months ago, Fitch rated the country’s Long-Term Foreign-Currency Issuer Default Rating at B+ with a negative outlook, with positives like a favourable government debt structure, a strong growth track record and relative macroeconomic stability balanced against negatives of rising public debt, high net indebtedness and below “B” range medians GDP per Capita and governance indicators.